About TLB

Philip Jessup proposed the idea of a transnational law course. His vision of the subject was broad, including public and private international law; state and non-state actors; business, administrative, and political affairs; as well as negotiation and litigation. Inspired by his idea, TLB is only constrained by its pursuit to address all law transcending national frontiers.

September 09, 2009

A Proposed Solution for California Budget Crisis

People pointed to
California's divided government and the supermajority law, which requires the
legislature to adopt a budget with a two-third vote as reasons that cause the
ongoing budget crisis in the Golden State over the last decade. The budget,
which was passed by Arnold Schwarzenegger on July 24 of this year was said to
virtually guarantee another fiscal crisis next year despite the fact that it
comprises $15 billion in service cuts, including $8.1 billion in education
cuts. This is not to mention that California budget shortfall is projected to
top $40 billion over 2009-2010 fiscal years.

In searching for the
answer to California budget crisis, two law professors, professor Chris
Elmendorf of UC Davis and professor Ethan Leib of UC Hastings, recently
proposed an attractive solution published in the New York Times' Op-Ed
Columns. Here is how it would work.

If the Legislature and the governor
fail to adopt a budget four weeks before the deadline for the new fiscal year,
a group of randomly selected citizens — one from each legislative district —
would be convened to resolve the stalemate. Three competing budgets would be
drawn up: one by the governor, one by the Democratic caucuses in the
legislative branch and one by the Republican caucuses. (These proposed budgets
would have to be finalized before the citizens were selected.)

For
two weeks, the citizens’ assembly would hear from and question government
leaders, policy experts, interest groups and other supporters and critics of
the proposed budgets. The citizens would then deliberate among themselves and
vote by secret ballot on which of the budgets to adopt. The vote would take
place on the budgets as originally submitted; neither the citizens nor
lawmakers would be able to make amendments. The winning budget would become law.

This
arrangement would have a number of virtues. First, it would ensure that states
adopt budgets in a timely fashion, protecting bond ratings and freeing
lawmakers to attend to other important business.

Second,
it would give the three institutional actors in the budgetary process — the
governor and the Democratic and Republican caucuses — strong incentives to
devise budgets that appeal to middle-of-the-road voters, not political
ideologues or special-interest favor seekers. Citizens who participate in the
two-week assembly would also learn an awful lot about their state’s fiscal
situation and competing legislative priorities. These citizen participants
would not be as susceptible to sound-bite misinformation as in more traditional
exercises of direct democracy.

Our
scheme would also do wonders for accountability. When budgets are adopted under
divided government (or supermajority requirements), it is hard for voters to
figure out exactly who is responsible for the shape of the compromises. If the
upside of divided government is centrist compromise, the downside is weakened
retrospective accountability at the polls. Our approach to budgeting promotes
accountability because the enacted budget would unequivocally belong to “the
governor,” “the Republicans” or “the Democrats.” Dissatisfied voters would know
exactly whom to reward or fault when they go to the polls at the next election.

Finally, our proposal honors
Americans’ insistence on a strong popular voice in government, without
demanding too much of citizen participants. It would require them to perform
only a fairly simple task: rank your preferences among three proposed budgets,
after hearing out the proponents and opponents of each.

I found the professors'
proposal convincing. Nevertheless, given how fed up our voters are as showed
during May 2009 special election, I am concerned if Sacramento's effort to
solve the budget crisis would get the same treatment it deserves to have. Being the
tenth largest economy in the world, California has been loosing its competitive
advantage in the eyes of investors by being the state that can't solve its
problems. The longer Californians refuse to subjectively face this dilemma, the
more harmful and long-lasting the effects.